In alphabetical order, what do Alcanna (TSX: CLIQ), BELLUS Health (TSX: BLU)(NASDAQ: BLU), Cineplex (TSX: CGX), and Diversified Royalty (TSX: DIV) have in common? Well, these four stocks are the top buys on the TSX in May 2021. If you have $2,000 to invest today, you can purchase $500 worth of each stock and expect substantial gains.
Specialty retail
Alcanna is a premier retailer of alcohol and highly regulated controlled substances (wines, beers, spirits, and cannabis) in North America. The $252.7 million company from Edmonton is a dynamic organization with 250 liquor and cannabis retail outlets.
As of May 21, 2021, the share price is $6.98, and thus far, current investors are enjoying a 17.91% gain. Market analysts recommend a strong buy rating and foresee further gain of 97% to $13.75 in the next 12 months. Alcanna’s trailing one-year price return in 220.18%.
In Q1 2021 (quarter ended March 31, 2021), total sales grew by 2.8% to $142.2 million versus Q1 2020. From a net loss of $9.2 million, Alcanna reported $47.6 million in net earnings. During the same quarter, the company partnered with YSS to form Nova Cannabis, a new discount-focused cannabis retailer.
Growth driver in the making
While BELLUS Health trades at only $4.66 per share, analysts forecast a 157.5% price appreciation to $12. Your $500 could potentially grow to $787.50 in one year. The healthcare stock is also among the better performers in 2021 with its 21.67% year-to-date gain.
The $365 million clinical-stage biopharmaceutical firm develop novel therapeutics to treat chronic cough and other hypersensitization-related disorders. Its lead product candidate is BLU-5397, a highly selective P2X3 antagonist. Once it passes clinical trials and receives regulatory approval, BLU-5397 may be the viable treatment option for patients suffering from chronic cough or chronic pruritus associated with atopic dermatitis.
A faster-than-expected recovery
The Cineplex stock is recovering from the pandemic faster than expected. Its year-to-date gain is 51.02%, and according to analysts, the current share price of $14 could hit $17 or a 21.4% upside in the near term. COVID-19’s impact on the business is brutal because the most prominent theatre operator in Canada lost its propensity to generate revenues as it had in the past.
Unlike in the U.S., cinemas in Canada have yet to enjoy a return to business. Traditional cinemas are also losing a lot of ground from streaming services like Amazon and Netflix. Despite the challenges and threats to the movie exhibition industry, investors are happy with Cineplex’s remarkable comeback.
Pure dividend play
Diversified Royalty is a cheap dividend play. At $2.51 per share, would-be investors can partake of the juicy 7.97% dividend yield. Don’t expect much capital gain, although the royalty stock is up 9.03% year to date.
The $305 million multi-royalty corporation from Vancouver acquires royalties from multi-location businesses and franchisors in North America. Currently, Diversified Royalty owns the trademarks to AIR MILES, Mr. Lube, Mr. Mikes, Nurse Next Door, Sutton, and Oxford Learning Centres.
In Q1 2021 (three months ended March 31, 2021), the royalty firm’s top line increased 4.8% to $7.6 million compared to Q1 2020. Notably, net income for the quarter was $4.1 million versus the net loss of $11.7 million in the same period last year.
Diversified portfolio
Canadians with just $2,000 to invest can build a diversified portfolio. All four stocks display respectable performances in 2021, notwithstanding the continuing pandemic.
